Overall insurance penetration (premium as percentage of GDP) in India has increased from 2.3% in 2001 to 5.2% in 2011. While the number of life policies in force has increased nearly 12-fold in the last 10 years, health insurance has seen about 25 fold increase, a study jointly conducted by Ficci and Boston Consulting Group said.
The insurance industry will continue to outpace the rapid economic growth to reach $ 350-400 billion in terms of premium income by 2020, making India among the top three life insurance markets and top 15 non-life insurance markets by 2020.The increase is primarily due to significant shift in the availability of products including, ULIPs, whole life, maximum NAV guarantee, auto assistance, auto pay per km insurance, disease management, and those policies related to wellness.
“While the industry has come a long way over the past decade, the big challenge with the industry is profitability. Private life insurers have accumulated losses of over R16,000 crore till March 2010.
Similarly, the non-life industry has cumulative underwriting losses of nearly R30,000 crore,” said Alpesh Shah, partner and director, BCG India.